Empowering Individuals to Be Better Healthcare Consumers
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Transcript of Empowering Individuals to Be Better Healthcare Consumers
1
An Assessment of how consumerism And innovAtion in heAlthcAre Are redefining how consumers engAge with the heAlthcAre system.
Empowering Individuals To Be Better Healthcare Consumers
uncommon clArity
Q1 / 2013
Industry Perspective
TRIPLE-TREE.COM2
Founded in 1997, TripleTree provides independent, research-driven advisory
services on mergers and acquisitions, recapitalizations, divestitures and raising
growth capital for innovative companies in healthcare.
We are continuously engaged with decision makers across the sector including
best-in-class companies balancing competitive realities with shareholder objectives,
global companies seeking growth platforms, and financial sponsors assessing
innovation investments or first mover opportunities.
Tabl
e of
Con
tent
s
Q1industry PersPective
4 / EVOLUTION OF CONSUMERISM IN HEALTHCARE
4 / WAVE 1: RISE OF CONSUMER-DIRECTED HEALTH
5 / WAVE 2: INITIATING TRANSPARENCY AND ENGAGEMENT
6 / WAVE 3: ENABLING A “FULLY RETAIL” INDUSTRY
8 / HOW STAKEHOLDERS ARE SOLVING FOR THE EMPOWERED CONSUMER
8 / PAYER MARKET
8 / DISTRIBUTION
10 / CONSUMER ENGAGEMENT
15 / PROVIDER MARKET
15 / PROVIDER-LED CARE COORDINATION
16 / PATIENT ExPERIENCE
20 / WHERE PAYERS AND PROVIDERS GO FROM HERE
21 / NEW APPROACHES BEYOND THE PAYER-PROVIDER PARADIGM
23 / LOOKING AHEAD
TRIPLE-TREE.COM2
INTRODUCTION
Consumerism in the healthcare industry has been steadily building
for more than a decade with the consumer increasingly placed at the
center of the care delivery and decision-making process. Viewed
through the lens of many healthcare product and pharmaceutical
companies as well as select services providers (e.g., Weight Watchers)
that have been addressing the health needs of consumers through
business-to-consumer (B2C) and direct-to-consumer (DTC) models
for considerably longer, consumerism is already here. For payers and
providers however – and for the technology and service companies
they rely on – consumerism is new, and the change is having a
significant impact on the industry.
This change originated largely through the introduction of consumer-
directed health (CDH) plans as a vehicle for employers to shift a
greater portion of total healthcare costs to employees and engage
them in the management of their own healthcare. Initial employee
uptake was slow, but increasing healthcare costs have persisted and
continue to influence employer and health plan strategies to help
consumers make better decisions about how to navigate the healthcare
system and manage their own care and conditions. Despite continued
growth in adoption of CDH plans and the accompanying significant
shift in financial liability to consumers, the impact to date on getting
consumers to manage their health has only been modest. Today, CDH
is one important part of the consumer equation, but evolving market
forces, including the blurring of lines between payers and providers
(e.g., payers vertically integrating with providers; and providers taking
on risk and becoming more like payers), are further complicating the
landscape by redefining who the consumer engages with as he or she
navigates the healthcare system.
TRIPLE-TREE.COM2
INDUSTRY PERSPECTIVE Q1 / 2013 3
The shifting of the healthcare cost burden to consumers has
impacted not only who pays for care but also how treatment options
and care experiences are evaluated. This new role is changing how
consumers are being marketed and communicated to. As a result,
new tools designed for consumers to better manage their own health
and care options have emerged. Today, the market is focused on
improved transparency, quality, and customer experience through
tools and services more akin to the financial services and retail
sectors than healthcare.
Marketplace demand for more dynamic consumer focus is also being
accelerated by health reform. For payers, the expansion of insurance
coverage coinciding with the implementation of insurance exchanges
is creating new distribution channels where direct linkages with
consumers can be established. Providers are facing new consumer
realities as well, as reform has initiated and accelerated the
development of accountable care organizations (ACOs) and value-
based reimbursement models, which require providers to think about
consumers in new ways as patients, members, and consumers whose
experience, satisfaction, and outcomes needs must be addressed.
These macro forces are creating demand for a more “retail”
environment across an industry that has previously resisted these
levels of consumer transparency and control. If successful, this
transformation would eliminate the historical barrier between
the healthcare system and the consumer, paving a path for a
more retail-oriented healthcare market as B2C and business-to-
business-to-consumer (B2B2C) models penetrate the system.
While the impact of consumerism may be top of mind for many
organizations, it’s still early and true consumer platform solutions
are unique. Healthcare organizations know that a failure to promote
transparency and increase consumer engagement going forward
will challenge their business models. As a result, constituents
across the system are focused on developing and maintaining
points of intersection with consumers in order to maintain
engagement and influence decision making.
Numerous research pieces have focused on the opportunity to activate
the healthcare consumer through B2C and DTC business models; this
report predominately focuses on the B2B2C models that are pervasive
in healthcare.
INDUSTRY PERSPECTIVE Q1 / 2013 3
TRIPLE-TREE.COM4
The evolution of consumerism in healthcare can be defined by three
waves, as outlined in Figure 1 below. The initial wave was in part
initiated by the introduction of CDH, which helped incite consumer
interest in how they access and navigate the healthcare system as
well as manage their own health. The persistent cost shift has led
to new demands on healthcare organizations to enable transparency
and engagement through a second wave of consumerism. This
evolution will likely persist through a third wave as consumers now
demand a degree of control and decision support in healthcare that is
on par to that of other industries – that is, a fully retail experience.
Wave 1: Rise Of Consumer-Directed HealthEarly CDH strategies were largely product-driven, with health
plans and employers collaborating to educate the market on health
savings accounts and the convergence of healthcare and financial
services. A key assumption for CDH products was consumer
willingness to accept additional financial responsibility for their
healthcare in exchange for greater control over how and where to
pay for it. Early employer-driven efforts to drive CDH adoption were
focusing on making management of CDH more straightforward for
employees; this led to significant adoption, as employers sped to
Figure 1: Three Waves Of Consumerism In Healthcare
EVOLUTION OF CONSUMERISM IN HEALTHCARE
THREE WAVES OF CONSUMERISM
1 C O N F I D E N T I A L Property of TripleTree. Not For Distribution.
1st Wave: Rise of Consumer-Directed Health
3rd Wave: Enabling a “Fully Retail” Industry
2nd Wave: Initiating Transparency and Engagement
• Transition driven by introduction of CDH plans and various cost-sharing mechanisms
• Early CDH plans had minimal success in getting consumers to manage their health
• Consumers learn to “shop” and navigate the healthcare system
• New demand for resources to support consumer decisions and provide transparency
• Need for a “retail” approach as balance has shifted toward the consumer
• Personalized approach need to address individual needs and drive engagement
CDH Plans Introduced
Growth in Out-of-Pocket Spending
Tax-Exempt Savings Plans
Introduced
Acceleration of Consumer-
Focused Tools
Integration with Financial
Services
Web Adoption and
eCommerce
Cost Transparency
Tools
Retail Distribution
and Exchanges
Value-Based Purchasing
INDUSTRY PERSPECTIVE Q1 / 2013 5
CDH alternatives to address their growing healthcare cost burdens.
However, as CDH plans have required consumers to assume a
growing financial responsibility for their healthcare costs, a major
weakness has been the lack of transparency and information
provided to consumers, which has had a detrimental effect on
consumer engagement.
Despite growing consumer interest in their healthcare spending and
coverage decisions as result of the cost shift, the adoption of CDH
plans has not demonstrated significant success in driving consumers
to manage their health. While CDH is still very much part of employer
and payer strategies to manage healthcare costs, it is clear that there
is more to be done in order to enable sustained engagement with
consumers as they navigate the healthcare system.
Wave 2: Initiating Transparency And EngagementThe major byproduct of CDH has been the emergence of the
empowered consumer, who is just beginning to learn to shop
and navigate the healthcare system and gain a similar degree of
autonomy to what he or she is able to experience in other industries.
However, while costs were shifted to consumers, healthcare
organizations were not prepared to support the empowered consumer
whose expectations for information and tools exceeded the ability of
the system to deliver.
As outlined in Figure 2, healthcare organizations were relatively
unprepared for this development, primarily as a result of their
legacy B2B business models and historical investment focus around
improving administrative efficiency: most B2B models were built
to solve for the needs of large groups or employers with efficient
cost models, not to establish and leverage points of interaction
with healthcare consumers. Ignoring (or avoiding) these valuable
consumer touch points left many organizations poorly prepared to
understand consumer wants and needs.
Figure 2: Historical Barriers To Consumer Engagement
TRIPLE-TREE.COM6
Healthcare organizations have realized the need to accommodate
the changing needs of consumers and create environments where
consumers can shop and navigate the healthcare system in a
similar fashion to other industries. As indicated in Figure 3, much
in the way that Amazon democratized consumer purchasing for
everything from books to auto parts, healthcare is undergoing a
similar transformation as healthcare organizations strive to address
the reality that consumers are at the center of their marketplace and
that winners will become trusted, convenient resources for consumer
healthcare lifestyle management and decision making. While the
result has left consumers with a host of newfound resources and
tools to manage their own health, healthcare organizations are
consistently challenged to ensure consumers actually use these tools
when making healthcare choices.
In many ways, CDH adoption was a catalyst to healthcare’s
newfound appreciation for consumerism and brought several
underlying dynamics to light, most notably how much work was
needed to support the empowered consumer. New B2C and
B2B2C models have established direct linkages between healthcare
organizations and consumers that previously did not exist. In
order to maintain momentum, healthcare organizations will need
to prioritize future investment in further eliminating the barriers
that limit positive healthcare experiences for consumers as well as
driving engagement beyond enrollment and annual renewal – rather,
across the consumer lifecycle.
Wave 3: Enabling A “Fully Retail” IndustryThe demand from consumers to successfully shop and navigate
the healthcare system has been accelerated by healthcare reform,
which is shifting the industry towards greater individual orientation:
the number of consumers making individual coverage and benefit
decisions is set to grow substantially. While this is already the
status quo in Medicare following the 1997 establishment of Medicare
Figure 3: Shifting Power Paradigm – Stakeholders Aligning Around The Consumer
INDUSTRY PERSPECTIVE Q1 / 2013 7
Advantage plans (then referred to as Medicare+Choice plans), the
senior marketplace will expand dramatically as baby boomer lives
transition to Medicare over the next 20 years.1 The under-65 individual
marketplace is set to grow rapidly following the introduction of
government-funded public exchanges; these are expected to serve
as the primary vehicle for over 30 million people gaining coverage.2
Furthermore, an anticipated shift of employers to defined contribution
benefit programs will provide additional consumers with control
over their coverage decisions. Early evidence suggests that a shift to
defined contribution could be significant, with over 25% of employers
considering this new approach.3 This will fuel the evolution of private
exchanges and decision tools to support employee coverage decisions.
Collectively, these developments point to tens of millions of people
purchasing healthcare on an individual basis, highlighting the need
for healthcare industry constituents to solve for the needs of these
consumers in a more retail-oriented, B2C marketplace.
While this shift to the individual is underway, the evolving care delivery
and provider reimbursement environment is heightening focus on
improving quality, performance and consumer experience across the
system. Reimbursement is transitioning towards models where payers
and providers are rewarded across various quality and performance
measures such as the Five Star Quality Rating System for payers
and Consumer Assessment of Healthcare Providers and Systems
(CAHPS) for both payers and providers. These new models provide
consumers with resources to evaluate their options across both health
insurance coverage as well as care options based on these metrics.
This evolution has empowered consumers and established a market
for tools to help them with their benefit, coverage, and care decisions.
The primary end goal of this effort is to provide consumers with a
“retail” experience that is similar to other consumer product and
service markets that maintain meaningful consumer engagement.
However, the early efforts of healthcare organizations to develop
the needed support tools have been largely unsuccessful given
their inability to address individualized needs and preferences (e.g.,
patient-specific risk factors, communication preferences, and cultural
differences). In order to establish a lasting link with consumers, it is
clear that more personalized approaches will need to be developed
in order to enable consumers with a customized and transparent
experience as they shop and the navigate the healthcare system.
TRIPLE-TREE.COM8
The transition to viewing members and patients as consumers has
not been easy as healthcare organizations have been unprepared to
address the rising consumer expectations that have developed.
Payer MarketIn response to the empowered consumer, payers are prioritizing their
efforts to accommodate consumer needs and orient business models
around a consumer-driven world. Payers were caught relatively
flat-footed by consumerism as their historical investments, which
were focused on improving workflow automation and decreasing
unit cost, left them unprepared to address consumer needs. These
investments, rooted in payers’ traditional B2B models, intentionally
created barriers to the consumer – for instance, requiring consumers
to interact with call centers and interactive voice response (IVR)
systems. As a result, payers were left with minimal understanding
of consumer needs across their critical business drivers, such as
distribution, care management, and care delivery.
Payers have realized the need to better accommodate consumers
(or members) and create an environment where they possess
the resources to manage their own health and benefit options. As
consumer demands increase, payers have prioritized investments
around improving interactions and engagement while also driving
greater efficiency around care coordination and cost containment.
While many early consumer-focused investments left much to be
desired, there appears to be a consensus among payers that more
targeted and personalized solutions are needed in order to sustain
engagement across the entire consumer lifecycle.
Distribution One area of considerable payer-led innovation has been within health
insurance distribution, where retail-oriented sales and distribution
capabilities more consistent with other insurance sectors such as
property and casualty are emerging. To maintain top-line growth
amid growing competition and consolidation, payers are learning to
better manage consumer interactions in an effort to improve member
acquisition, retention, and cross-selling initiatives. A range of vendors
have developed expertise to support payers in these areas. As
demonstrated in Figure 4, by applying analytics to better summarize
consumer data and preferences, these specialized vendors –
highlighted by HealthPlan Services, Connextions, and Connecture
(through their ConsumerEdge™ and Plan Advisor tools) – have allowed
payers to address loyalty and retention issues through a series of more
targeted and personalized member interactions, which have plagued
HOW STAKEHOLDERS ARE SOLVING FOR THE EMPOWERED CONSUMER
INDUSTRY PERSPECTIVE Q1 / 2013 9
health plans historically.4 Additionally, they are able to utilize data
from everyday consumer interactions to improve sales and distribution
by establishing more effective communication methods for payers,
achieved through an improved understanding of individual consumer
preferences and lifestyle characteristics. In a sense, these vendors
have extended the payer-consumer sales relationship from a once a
year enrollment process to continual, year-long engagement.
Looking forward, the distribution of health insurance is likely to be
transformed by the advent of exchanges. The driving force behind the
in-development public exchanges is to make coverage more affordable
through expanded risk pools (supported by various mechanisms to
offset risk assumed by exchange participants) and to make distribution
administratively efficient. Exchange products will be largely
standardized, making it difficult for payers to compete on product
alone – as a result, payers will need to find other ways to compel the
Figure 4: Outlining An Integrated Approach To Insurance Distribution
HealthPlan Services (HPS) provides sales and distribution, benefits
administration, and customer service solutions to the individual,
small group, and voluntary markets. HPS’s platform extends across
the consumer lifecycle, beyond member acquisition and renewal,
providing payer clients with an end-to-end solution to influence
member experiences across distribution, purchasing, and benefits
administration. Its approach integrates clinical, financial, and
personal data from across the consumer lifecycle to provide clients
a more transparent view of their member population, which fuels
their member acquisition, retention, and service administration
efforts. This is important to not only drive revenue for payers
but also to “redefine” the relationship with members through a
personalized engagement approach.
Integrated, analytics-driven approach to member acquisition, retention, and service establishes unique touch-points that drive value across the member
lifecycle and “redefine” the payer-consumer relationship
TRIPLE-TREE.COM10
individuals shopping on exchanges. Many of the specialized sales and
distribution support vendors highlighted above will also be increasingly
relevant to payers in this area as a robust understanding of consumer
preferences and purchasing behavior is needed to define payer marketing,
pricing, and branding strategies for the individual consumer.
Consumer EngagementThe challenges payers face in engaging consumers extends far
beyond enrollment and renewal, as their ability to influence consumer
behavior and lifestyle decisions is still limited. This is imperative not
only to improve the health of their member base, but also to maintain
profitability going forward, as poor engagement can lead to costly future
consequences when health risks remain unknown and / or not addressed.
Payers have traditionally offered a static, one-size-fits-all consumer
experience in which their interaction was limited to such examples
as a provider network directory or call center encounter. Payers have
introduced a host of new tools and solutions to establish more effective
consumers interactions around healthcare education and content;
however, consumer adoption has been somewhat challenging for many
payers. Early tools possessed little appreciation for individual-specific
needs and preferences and were quickly dismissed by consumers. As
consumer demands have persisted, payers have begun to accommodate
individual needs and preferences into these tools to provide consumers
Spotlight: Payer-Led Retail Initiatives As insurance distribution
becomes increasingly individual oriented, several payers have
launched retail initiatives designed to establish a direct channel
to consumers to extend their product distribution and customer
service capabilities. UnitedHealthcare has introduced retail
stores in local shopping malls, where consumers can compare
and buy insurance products as well as learn more about their
existing benefit and coverage options. Many of these stores are
intended as temporary locations focusing on servicing Medicare-
eligible beneficiaries during their annual open enrollment period.
However, the company also offers permanent locations in eight
locations across Queens, Manhattan, Philadelphia, and Los
Angeles. Similarly, Highmark and Florida Blue operate retail
locations in Pennsylvania and Florida, respectively. Florida Blue
is pursuing a unique strategy to maximize the benefit of their
retail footprint by incorporating a customer service element in
addition to the distribution touch point, as well as adding on-site
clinics at several retail locations. Aetna has made a unique play
by recently forming a partnership with Costco to sell individual
health insurance products in their stores across several states.
Time will tell if any of these models transform the landscape of
insurance distribution, but they clearly show another example of
payers’ acceptance of the empowered consumer and their need
to innovate.
INDUSTRY PERSPECTIVE Q1 / 2013 11
with more effective resources to manage their benefit, coverage,
and care decisions. Some of the most innovative tools have come
from third-party vendors, such as Healthline Networks, which has
created solutions that allow a payer to deliver patient-specific content
based on a member’s individual health data drawn from medical and
pharmacy claims as well as clinical data from the electronic medical
record (EMR). Continued innovation of these consumer-friendly
solutions has come from vendors such as Silverlink and Eliza, which
deliver personalized, targeted messaging solutions to consumers via
multiple communications channels (email, web, automated voice, mail
and SMS text) that allow payers to influence an indvidiual’s medication
and care plan adherence as well as communicate plan-specific
information. While solutions like these are still early in their evolution,
the ability to sync patient-specific care information with personalized
messages and consumer education tools via multiple communication
channels creates a more effective medium in which payers can
successfully communicate with and engage their membership base.
A central theme in engaging the empowered healthcare consumer
is providing transparency into the cost and quality of treatments
and providers. The lack of transparency that exists in the current
system, combined with the ever-growing financial liability faced by
consumers, makes this an imperative for the entire industry, with an
enormous gap between consumer needs and available tools. This
need has been recognized by industry and government alike, with over
30 states passing transparency-related legislation and the increasing
prevalence of all-payer claim databases that are intended to inform
cost transparency efforts. Significant commercial momentum has
been focused on creating cost transparency, with the importance of
the space highlighted by the attraction of capital to Castlight Health.
Healthline Networks uses a unique, medically-guided taxonomy
engine that incorporates over two million semantic relationships
to normalize large volumes of structured and unstructured
content from disparate sources. This taxonomy allow healthcare
organizations to unlock the full value of massive amounts of
siloed and disparate health content and data by personalizing this
information to improve decision-making, outcomes, and the overall
health experience. Payers, for example, use the technology in
their consumer portals to improve the health and wellness of their
members by individually personalizing both search results and
engaging content that are tailored to a member’s constantly-evolving
health profile and benefit coverage.
TRIPLE-TREE.COM12
A range of approaches to cost transparency has emerged, with most
solutions initially focused on providing the average total cost of a
particular high cost service based on national or regional average
data (e.g., all payer claims or CMS data). Solutions are evolving
and becoming more personalized – to estimate the out of pocket
cost an individual should expect to pay when utilizing healthcare
services or consuming prescription drugs based on his or her health
plan, provider of choice, network, benefits design, and remaining
deductible, as applicable.
Solution vendors face two particular challenges in providing
this information:
1: The first is the data analytics and data integration capabilities
required to estimate a consumer’s financial liability for a service, as
the data resides with the payer or employer (through their payer).
Analytic capabilities are then required to predict how a service
will be billed to the health plan (for example, the cost of a knee
replacement surgery will consist of a numerous separately billed
CPT codes). The leading competitors in pure cost transparency
through robust data analytics and data integration are Castlight
Health, Change Healthcare, and Truven Health Analytics. Additional
approaches to the market include that of Healthcare Blue Book,
which provides both a free solution to consumers that delivers an
estimated “fair price” representing a payment level that providers
would accept from insurance companies, as well as a solution for
plan sponsors that customizes pricing data based on historical
claims. (A more broadly defined transparency landscape – including
provider search, provider quality / ratings, and similar solutions
– would expand the list of competitors to include vendors such
as Vitals and Healthgrades.) Many health plans are pursuing
transparency using homegrown tools, typically providing the service
to customers and members for free, but many plans still recognize
an advantage in “plugging in” 3rd party solutions to consolidate
data from multiple medical carriers, pharmacy benefit managers,
and dental providers in one location and to create a consistent
experience for all employees with a higher degree of customization.
2: The second challenge has proven more formidable: making the
information easy to use such that individuals actually choose to
engage with such solutions and become healthcare consumers.
Accomplishing this would translate transparency into the larger
issue in healthcare – consumer engagement – which health
plans and employers have struggled to drive. Consumers are not
familiar with “purchasing” healthcare services – engagement with
consumers around transparency is a critical step in transforming
consumer behavior. Most transparency solutions are focused on
clarifying the cost of high cost elective and scheduled procedures
INDUSTRY PERSPECTIVE Q1 / 2013 13
Figure 5: Critical Success Factors For Transparency Solutions
Access to a broad set of applicable health plan network prices
or claims data applicable to a specific population
Consumer friendly and ease of use
Personalized and proactive messaging
Technology and analytics that drive broad engagement
Broad service offering including quality and comprehensive
medical cost categories (e.g., medical, pharmacy, specialty)
Ability to integrate and work within a health plan’s or
employer’s portal and coordinated member communications
(such as the knee replacement example above) because these
services offer opportunities for significant savings to the consumer
(and even more so to the plan sponsor) through smarter shopping.
However, these services are typically very low frequency events,
which makes it a challenge to create engagement with a consumer
who may not need the transparency service for months or even
years from initial sign-on. Furthermore, the early experience from
self-insured employers indicates that if a beneficiary tries to use a
cost transparency service and finds the information insufficient or
otherwise not helpful, the level of engagement from that consumer
is dramatically reduced – they may never attempt to use the service
again. For these reasons, solutions are evolving to incorporate
proactive messaging and alerts to make healthcare purchasing
decisions more meaningful and actionable to consumers. Change
Healthcare highlights an innovative approach through its Ways
to Save™ alerts, which are personalized messages that introduce
specific opportunities for savings based on each individual’s
purchasing history with communications that are tailored to the
individual’s preferences and user profile and are designed with
behavioral science principles to maximize engagement.
By orienting the consumer around personal savings instead of purely
cost, and by driving broad engagement that is initiated through use
of a transparency solution, vendors are increasingly focused on
elevating the relationship with the consumer to build fundamentally
different healthcare purchasing behavior and extend solutions into
other decision support capabilities, such as plan selection and health
program engagement. Transparency solutions are thus at an early
stage and continue to evolve. TripleTree sees several requirements
for future success in this space, as seen in Figure 5.
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In fact, consumer engagement should extend far beyond transparency
as consumers require additional support to navigate an increasingly
complicated healthcare system. This is particularly the case when
a patient faces a complex and serious diagnosis, which could
require expensive treatments from multiple providers, or when an
individual or family faces substantial and confusing bills. The vast
complexity that the healthcare system presents to some individuals
at their most vulnerable and confused times has led to navigation
and advocacy services that in many ways function as the “help desk
for your health” to consumers. Several vendors, such as Health
Advocate and Accolade, have gained significant market momentum
by serving as support resources to consumers in managing a
wide range of clinical and administrative issues in their healthcare
coverage. Common administrative support includes areas such
as claims resolution, appeal processes, and bill settlement, while
clinical services often involve providing critical decision support to
consumers to guide them through care decisions and to measure the
costs associated with various care alternatives.
Health Advocate delivers a suite of advocacy solutions designed to
provide consumers with a greater understanding of their care and
coverage options. Administrative support services assist consumers
in navigating their benefits, resolving claims, and negotiating and
paying medical bills. Clinical support services are led by a team
of Personal Health Advocates trained to provide around-the-clock
assistance across a range of issues, including identifying optimal
treatments and providers, and assisting with care coordination
through scheduling, securing second opinions and assisting with
complex medical conditions. These Personal Health Advocates also
deliver coaching services to consumers to help them understand their
medical conditions, address questions related to common procedures
and treatments, and prepare them for medical appointments. In
addition, Health Advocate delivers a suite of complementary solutions
designed to support employee health and well-being. These range
from wellness and work-life support services such as a nurse line
that provides healthcare advice and information, to personalized
health messages that promote prevention to the general population
and chronic care “best practices” to those with specific diseases, to
advanced tools that gauge benefits utilization or estimate medical
costs and savings opportunities.
INDUSTRY PERSPECTIVE Q1 / 2013 15
Provider MarketEvolving market forces and the blurring lines between payer and
provider have caused providers to view consumers in a new light
– not only as patients but also as members and consumers. To
varying degrees, providers are increasingly assuming risk that
more closely ties their financial performance to their performance
on dimensions of cost, quality, and outcomes. At one end of the
market, many providers assume fully-delegated risk for their patient
population – essentially functioning as payers given they possess the
identical incentives of a traditional health plan to manage the total
cost associated with caring for a population. This is accelerating
rapidly through the experimentation and proliferation of ACOs,
an important result of healthcare reform. At the other end of the
market, most providers remain largely risk-free (under fee-for-
service reimbursement arrangements), but are increasingly under
pressure to assume some degree of risk through reimbursement
models that incorporate performance on various measures, including
patient satisfaction and quality of care. Regardless of any connection
between clinical performance and reimbursement, all providers now
pay much more attention to these performance measures, as their
bottom line is still directly impacted in a consumer-driven world.
Consumers increasingly possess the tools and resources to evaluate
providers on a number of dimensions and are beginning to use this
information in their care decisions. In all of these situations, the
blurring lines between payers and providers create an increasing
need for providers to solve for many of the same aspects around
consumer experience and engagement as payers.
Provider-Led Care Coordination Providers that function essentially as payers have many of the
same incentives to engage members holistically in order to manage
healthcare costs, patient experience and care outcomes. This
is well established in markets like Southern California in which
certain providers have managed fully-delegated risk relationships
at scale for some time. In these environments, providers have
widely adopted various tools and solutions to support engaged
care management and care coordination efforts. These tools allow
providers to analyze clinical and financial outcomes as well as
practice medicine in accordance with best practices. Vendors such
as CERECONS have been among early market movers in supporting
providers in fully-delegated risk environments, serving as the link
between at-risk provider organizations or ACOs and their distributed
provider networks along the care continuum to continuously monitor
and improve clinical and financial outcomes.5 These solutions
are delivered through a platform that engages the provider and is
embedded in the clinical workflow – in this sense, the individual
care provider is the “consumer” who engages in a new and more
meaningful way.
TRIPLE-TREE.COM16
Beyond full-risk bearing entities, the vast majority of other
providers increasingly care about managing cost, quality, and patient
experience as this all has the potential to impact their sustainability
over time through continued evolution of reimbursement models,
reputation (through the consumer lens, informed by widespread
access to quality, satisfaction, and other performance measures),
and payer network status. Early provider-led efforts to improve care
quality and coordination led to investments in EMR technologies,
which improved the acquisition of valuable clinical data. However,
these investments created limited capability to analyze clinical
outcomes and push actionable information back to providers,
or to manage care outside of the facility setting following an
encounter through consumer engagement – all of which limited
the effectiveness of these early solutions. As value-based or risk-
based reimbursement models evolve, advanced solutions that
support provider decision making, improve care coordination, and
facilitate consumer engagement will become increasingly relevant to
providers. As this occurs, solutions that allow physicians to identify
areas for necessary intervention and coordinate care before and
after each encounter will be critical. The solutions of Phytel, which
offer physicians the ability to appropriately identify and connect with
patients as well as monitor their responses and compliance with care
protocols, highlight sophisticated approaches to this type of provider-
led care coordination.
Patient ExperienceAs consumers become more aware of their treatment and provider
options, providers have become more market and consumer-focused
in their efforts to grow and retain revenue. Providers are not only
trying to address gaps that exist within their own care coordination
efforts but also to drive exceptional patient experience and help
consumers manage their journey through the healthcare system
more freely.
Phytel operates as an extension of the physician or care team outside
of the provider setting. Phytel’s unique software automates routine
care management functions, delivering physician reminders and
alerts as well as patient outreach and notifications. The software
platform leverages up-to-date clinical information and evidence-
based guidelines to allow providers to actively manage care
effectively and improve care outcomes across all phases across the
care continuum. In addition, Phytel has established care protocols to
identify care gaps and track overall performance across key quality
measures. This allows providers to identify appropriate intervention
opportunities to maintain proper patient adherence and avoid costly
care episodes.
INDUSTRY PERSPECTIVE Q1 / 2013 17
While not immediately obvious, key aspects of the patient experience
are the financial and transactional elements. As consumers become
responsible for ever larger total healthcare costs, providers are
faced with a new reality of managing consumer healthcare debt:
gone are the days in which providers could manage their financial
performance while only capturing pennies on the dollar of patient
receivables. This is important to providers not only to manage bad
debt, but also to enhance the patient’s overall satisfaction with the
experience, which ultimately influences attraction and retention
of patient volume. The billing and collections experience is often
a provider’s final touch point with a patient following a care
encounter and can wield a disproportionate influence on patient
satisfaction. Of note, billing issues can create unwarranted “patient
friction” and are a key source of unnecessary administrative hassle
for physician groups as they prolong the billing process and reduce
collection volume.
To support an improved billing and collections experience,
considerable innovation has occurred around the development of
tools to assess and manage patient financial responsibility. Provider-
focused revenue cycle management vendors now offer proactive
and targeted communications to support patients as they complete
the billing process. MedData has been among the early vendors to
market a patient-centric billing approach in which patient satisfaction
MedData delivers a suite of outsourced revenue cycle management
solutions to physician offices and hospitals, including billing, coding,
collections, and patient satisfaction services. MedData has emerged as
a leading vendor in managing the self-pay portion of the billing process
for providers. Among MedData’s core differentiators include patient-
centric billing and communications that address the convergence of
consumer engagement and satisfaction with provider reimbursement.
MedData’s approach to self-pay account resolution begins by
connecting patients with a specialist prior to the patient receiving a bill.
The specialist serves as a timely, hands-on reference to educate and
engage the consumer around various aspect of their bill. This strategy
identifies “at-risk” patients in need of specialized communication and
education both prior to and throughout the billing process, avoiding
confusion as well as identifying early patient payment issues. This
patient-first revenue cycle management approach yields timely
and accurate reimbursement in a more transparent manner, which
aims to improve patient satisfaction. In addition, these personalized,
introductory communications serve as valuable data points to gain
insight into patient satisfaction throughout the care encounter and
billing process. MedData is unique in that its solution avoids high stress,
facility-based patient intervention points in favor of pre- and post-bill
communications, in order to identify potential payment issues early on
as well as eliminate some of the more intrusive collection efforts that
have plagued similar patient pay billing efforts.
and communication are closely aligned, as outlined in Figure 6. The
company’s differentiating capabilities support pre-bill engagement
and the early identification of “at risk” patients who are most likely
to need specialized communication and education during the billing
process. This predictive analytics component of MedData’s offering
is reminiscent of solutions from an earlier wave of consumer
bad debt management, such as SearchAmerica, which developed
predictive algorithms and screening methodologies to assess the
likelihood that individual patients would pay their medical bills,
incorporating healthcare-specific consumer credit and demographic
data within the context of the revenue cycle workflow. Experian,
seeking to apply their expertise from other verticals in healthcare,
acquired SearchAmerica in 2008 in what has now become Experian
Healthcare.6
Providers have made numerous additional efforts to expand their
service offerings both within and outside the facility in order to meet
escalating customer needs and enhance the providers’ consumer
value propositions. As a prominent example, providers can now
choose to offer their own versions of cost transparency tools to allow
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Figure 6: Convergence Of Patient Satisfaction, Engagement And BillingPATIENT LOYALTY AND RETENTION (MEDDATA)
7 C O N F I D E N T I A L Property of TripleTree. Not For Distribution.
Patient Disruption • Multiple bills from known
(e.g., hospital) and unknown providers (e.g., ED, hospitalist, etc.)
• Billed / gross charge vs. normal discount complexity
• Financial burden beyond current means
• No clear options for payment beyond 100% settlement
Physician Disruption • Clunky on-boarding with
new billing company impairs cash flow
• Limited pre-coding data verification
• No reconciliation against hospital activity logs
• Poor demographic information capture
• Inaccurate coding creates reimbursement and compliance risk
Patient-First RCM
Patient Hospital / Health System Physician Group
Ind
ust
ry P
ain
Po
ints
Patient-Centric Capabilities
Segment patients and customize outreach to optimize engagement
Connect with patients prior to them ever receiving their
first bill
Capture and update any missing demographic or insurance information
Conduct physician-focused patient satisfaction survey
Ind
ust
ry P
ain
Po
ints
INDUSTRY PERSPECTIVE Q1 / 2013 19
consumers to estimate the cost of treatment ahead of a scheduled
appointment as well as compare the cost of treatment options on a
facility-by-facility basis. However, achieving pricing transparency
has not been an easy task given the non-uniformity and complexity
of patients’ clinical needs along with significant variations in care
practices among physicians. Vendors such as Recondo Technology
and Passport Health Communications automate the registration and
eligibility functions at the front-end of the provider revenue cycle.
In addition, these vendors also address key consumer needs by
delivering cost estimation and payment collection tools that allow
consumers to assess their financial responsibility prior to or at point
of service. These solutions can verify eligibility, confirm plan details,
and calculate patient financial responsibility within the hospital
setting as well as assess and collect the patient responsible portion
of standard medical bills prior to service or while at the facility.
A second notable example is the advent of new patient education
tools that provide consumers with greater awareness of their
condition at all phases of the care continuum. Vendors such as Emmi
Solutions and PatientPoint seek to improve patient engagement
Passport Health Communications (Passport) delivers a range
of administrative, clinical and financial tools via real-time and
integrated technology to improve the efficiency and accuracy of
the revenue cycle process. Passport’s offering extends across the
provider revenue cycle, including insurance eligibility and benefit
verification services as well as medical necessity validation and
other claims management services. This includes a patient-friendly
payment management solution that provides price transparency and
enables payment collection at the point of service. The usefulness
of this solution to provider organizations is rooted in its ability to
assess patient liability based on price information in the facility’s
chargemaster, payer contracted rates, and patient eligibility and
benefits information, enabling them to collect payments at the point
of service.PatientPoint offers a suite of solutions that enable sustainable
patient and physician engagement along the entire continuum of
care—pre-visit, at the point of care, and post-visit. Through a set of
communication products available via web portal or facility-based
display screens that facilitate adherence, education and coordinated
communications, PatientPoint’s products aim to drive improved patient
engagement at the point of care and between care visits, which is vital
to improving the quality and efficiency of care delivery. The solutions
have use across provider and payer channels by providing a real-time,
interactive tool to manage patient populations as well as monitor for
gaps in care or adherence that can significantly impact overall clinical
performance and financial success.
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and adherence to care protocols through the delivery of web-
based patient education programs that support patients as they
manage their care. These types of solutions also play a role in care
coordination as providers are able to monitor whether patients have
adhered to care protocols.
Where Payers And Providers Go From HerePayers and providers are aligned in their efforts to improve how
consumers view their healthcare experience and to play a larger
role in supporting consumers’ everyday lifestyles and health
improvement. One area of continued innovation will be around the
consumer experience, as it has a direct impact on the ability of
healthcare organizations to enable consumer engagement. To that
end, healthcare organizations have grown increasingly aware of
their Net Promoter Score (NPS), which measures how end users
assess their overall experience using various products and services.
Organizations view this ranking as important to measuring and
improving customer loyalty as well as driving health improvement. As
healthcare has lagged behind other industries in levels of consumer
engagement and satisfaction, attention to improvement in NPS will be
a key focus area going forward as healthcare organizations attempt
to play a greater role in supporting consumers as they navigate the
healthcare system.
INDUSTRY PERSPECTIVE Q1 / 2013 21
Outside of the standard payer-provider paradigm, a range of
stakeholders have introduced a new wave of direct-to-consumer
products and services designed to address consumers unmet needs
and concerns. Some forward-thinking product distributors have moved
beyond traditional B2B distribution strategies in favor of DTC marketing
approaches that allow these products to be distributed in a timelier,
convenient manner. One example is Simplex Healthcare (Simplex),
which focuses on diabetic testing supply distribution. Simplex offers
members a “club” experience in which members are able to interact
through the Simplex website as part of a community of individuals with
similar conditions. Simplex is able to leverage this “community”, along
with targeted television advertising, to penetrate their core customer
segments with timely, targeted advertising directed towards critical
areas of need or intervention. Using this approach, Simplex is able
expand beyond their role as a distributor and reposition themselves as
a resource to their customers. This is relevant to payers and providers
as they seek approaches to better understand their patient populations
as well as how to identify timely points of intervention to influence
decisions or provide necessary support.
A host of new consumer-focused products and services that fall
outside of standard health insurance benefits have emerged that
are also delivered through a B2C channel. Consumers must pay the
full cost of these products and services – a break with the traditional
payer-provider paradigm. Wellness services offer a good example.
Driven by consumers’ desire to manage their health status, several
vendors that offer consumer-directed wellness management tools
have successfully penetrated the consumer market. For instance,
WellnessFx has been an early market mover in the B2C wellness
market through its web-based health management tool, which allows
consumers to track and manage their actual health condition based
on data generated through the results of a personal health screening.
Similar to consumer-oriented wellness, another area that has
significant B2C momentum is the preventive health screening
market where Life Line Screening has emerged as a clear
market leader. Life Line Screening has focused on solving for the
consumer experience, as evidenced by their NPS, which exceeds
that of Facebook and Google. The ability of Life Line Screening
to incorporate consumer preferences into their direct marketing
efforts has been critical to their success in initiating engagement and
establishing a presence in each local market the company enters.
This serves as another valuable example to payers as they seek to
establish brand recognition at the community level or to providers as
NEW APPROACHES BEYOND THE PAYER-PROVIDER PARADIGM
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they seek to extend their presence outside of their facilities. Life Line
Screening’s marketing approach has proven to penetrate various
consumer segments effectively as well as establish high-touch
interactions with consumers and influence decisions through their
screening results.
Innovative B2C strategies have proven to be effective in motivating
consumer behavior and decision making. These approaches are
relevant to payers and providers as they seek to expand consumer
relationships and establish longer-term member relationships
in order to eliminate the typical churn that complicates care
management and health improvement efforts.
Life Line Screening provides on-the-ground preventive health
screenings to identify health problems that might otherwise go
undetected. Life Line Screening’s services focus on identifying
key risk factors for conditions such as stroke, peripheral arterial
disease, diabetes, heart disease and osteoporosis. Life Line
Screening serves over 1 million consumers annually across over
16,000 screening events, providing a key resource to consumers
in managing their health risks. Life Line Screening utilizes a
nationwide, community-based approach, establishing their short-
term, local bases in community centers, churches, and other
community sites nationwide. Key to the approach is the company’s
highly recognizable fleet of buses that sit outside of their screening
locations, which serves as a highly visible branding to notify
consumers of their presence in the community.
INDUSTRY PERSPECTIVE Q1 / 2013 23
As healthcare spending continues to rise and consumers assume
a greater share of costs, their demands will influence how the
industry brings forth new solutions that help consumers manage
their healthcare and help improve the consumer experience.
These solutions will also allow healthcare organizations to align
their consumer strategies with care coordination and quality
improvement efforts to address the relentless increase in spending
that has defined the industry’s shift to consumerism.
The historical focus of healthcare technology investments
around administrative efficiency and workflow had positioned
most healthcare organizations elsewhere as consumer demands
shifted as a result of CDH. The “consumer ignorance” that has
resulted has plagued many early consumer-directed efforts by
failing to establishing consistent and effective interactions and
engagement with the consumer. We believe that these organizations
face dwindling alternatives to sustainability without a concerted
consumer engagement strategy – one that can influence healthcare
decision making. The urgency is real – the healthcare cost burden
placed on consumers is reaching its limits, and consumer demands
continue to grow.
Despite significant innovation across the payer and provider markets,
healthcare organizations are still challenged in understanding who
the consumer is, what they want and how they want it. Much
progress is being made, particularly as healthcare continues to
take cues from sectors like retail and financial services that have
developed much deeper consumer engagement capabilities. The
market leaders that emerge will be those who are able to close
the information gap between buyers and sellers and act more
like these leading retailers and financial firms in their ability to
understand and meet unique consumer needs and preferences. At
this point in the evolution of healthcare consumerism, the industry
lacks clear end-to-end platforms that fully satisfy end market
demands within consumer engagement, communications, support,
and other critical areas of need. However, we have illustrated
numerous emerging and incumbent solutions that are closing
the gaps between consumer demands and industry constituents’
capabilities, and which may serve as broader consumer-oriented
platforms in the future.
LOOKING AHEAD
TRIPLE-TREE.COM24
END NOTES
Kaiser Family Foundation, Medicare: A Primer, 2010.
Congressional Budget Office, Effects of the Affordable Care Act on Health Insurance Coverage – February 2013 Baseline, 2013.
Employee Benefit Research Institute, Private Health Insurance Exchanges and Defined Contribution Health Plans:
Is It Déjà Vu All Over Again?, 2012.
Disclosure: TripleTree was the exclusive advisor to Connextions in their sale to Optum in 2011.
Disclosure: TripleTree was the exclusive advisor to CERECONS in their sale to Medecision (a subsidiary of Health Care
Services Corporation) in 2013.
Disclosure: TripleTree was the exclusive advisor to SearchAmerica in their sale to Experian in 2008.
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